Megaupload case raises question of provider knowledge

Hollywood signals it will chase alleged copyright infringers around the globe, says InternetNZ

By Stephen Bell and Sarah Putt, Computerworld New Zealand |  Networking, copyright, intellectual property

How much knowledge does a platform provider need to have of the files being traded on their system before they can be considered culpable?

Intellectual property and ICT lawyer Rick Shera declines to discuss the Megaupload case specifically, as it is before the courts; but he says the existence of any number of similar "file-locker" sites, to which customers upload and from which others download files, raises an important general question about provider knowledge.

Sites such as Newzbin have been held culpable for merely providing links to material traded, in its case, via Usenet newsgroups. A British High Court judge last year ordered British Telecom to block access to the Newzbin site. This broad application of the law is cause for concern, says Shera; "I'm sure Facebook pages have plenty of links to infringing content."

In cases brought in the US against allegedly copyright-infringing sites, the "docket" giving details of the case has typically been sealed, meaning not even the defendant organisation can get access to it. Hence such cases have not hitherto been challenged in court to Shera's knowledge, he says, and the Megaupload case may be the first.

"To my mind, the most interesting and concerning aspect of such cases is the fact that a website can be taken down based solely on one side's evidence," he says. New Zealand legislation would require that the rights and interests of third-parties such as non-infringing users of the service be taken into account before any takedown is authorised. "I'm not sure that's the case under US law," he says.

The increasing possibility of any remote site being unexpectedly brought down by a copyright challenge is a factor to be taken into account when weighing up the viability of cloud-computing solutions, Shera agrees. "I wouldn't say it's a new factor; if you've got data in the cloud, you'd be pretty silly not to have some kind of independent backup."

The kind of "locker" storage of complete files Megaupload has been doing is not "file-sharing" within the definition of New Zealand's Copyright (Infringing File-Sharing) Act, Shera agrees; that act is directed at peer-to-peer services, where a file is typically assembled from pieces held by many users on the network. However, that is a point of technical interest only, since the action against Megaupload is under US law.

Some commentators have cited the Megaupload action as a demonstration that the present US law is working, so the Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) being contemplated by the US legislature are unnecessary. These acts were withdrawn for some redrafting last week in the face of international protest.

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